State Bank of Pakistan has extended the facility of deferral of principal till September 2020.
According to a SBP spokesperson, the Coronavirus epidemic continues to affect small and medium-sized businesses and households’ cash flows. Therefore, Bank Daulat Pakistan has decided to extend the facility of deferral of principal till September 30. However, this facility will be available only for small and medium business financing, consumer financing, housing finance, agricultural finance and microfinance.
This facility is not being extended to corporates and commercial borrowers as a large amount of their loans have already been deferred. It is expected that more businesses and households that were previously unable to avail the facility will now be able to do so.
In view of the growing concern about the possible economic impact of the Coronavirus epidemic, the SBP on March 26, 2020, in collaboration with the Pakistan Banks Association (PBA), launched a comprehensive plan to help businesses and households with their finances. Announced a package of measures.
An important step in this was the postponement of the principal amount of loans from banks and DFIs. It provided that businesses and households could apply for a one-year loan default, but would still have to pay the mark-up amount. The move also ensured that the default of the principal amount would not affect the borrower’s credit history and that these facilities would not be reflected in the credit bureau’s data as restructured loans.
The move proved to be very helpful for the borrowers as evidenced by the fact that by July 3, 2020, the banks had defaulted on the actual amount of loans of more than 359,000 borrowers to the tune of Rs 593 billion. The large number of borrowers, who constitute 95% of the total beneficiaries of the scheme as on July 3, 2020, comprises of small borrowers including SMEs, consumer finance and microfinance.
Extracted from City42 News
